Amendment to Finance Bill 2023

In News

• Recently, the Union Government has amended the Finance bill 2023 to simplify the tax system.

 Important Highlights Of The bill:

• The Union Government has scrapped the long-term capital gains treatment (with indexation benefits) for income from debt mutual funds and other schemes that invest up to 35% in equity shares of domestic companies.
  • Previous to the amendment the investments were considered long-term investments and taxed at 20% with indexation benefits.

•  Enhanced tax benefits to offshore banking units operating in GIFT city, offshore banking units to get a 100% deduction on income for 10 years. 
• Tax on royalty or technical fees earned by foreign (non-resident) companies hiked from 10% to 20%. This would increase the cost of Imports in case of a lack of a bilateral treaty.
• No change in tax on non-par savings insurance products ( ?5 lakh cap remains). 
• No change in taxation REITS/InviTs despite representation (Income from REITS to be taxed as ‘income from other sources and not as capital gains). 
• The securities transaction tax (STT) on the sale of options has been increased to ?2,100 on a turnover of ?1 crore against an earlier levy of ?1,700, an increase of 23.5%, while on the sale of futures contracts, STT has been raised to ?12,500 on ?1 crore of turnover against ?10,000 earlier, indicating a 25% hike.

Effects Of the Amendment:

• Increases the Tax burden on high net-worth investors and family offices who gained from the tax arbitrage under the existing tax regime
• Investors will opt to put their money into bank fixed deposits, equity mutual funds, and hybrid funds that invest over 35% of their portfolios in equity and Sovereign Gold Bonds.

How is a Money Bill different from a Financial bill? 

• While all Money Bills are Financial Bills, all Financial Bills are not Money Bills.  For example, the Finance Bill which only contains provisions related to tax proposals would be a Money Bill.
  •  However, a Bill that contains some provisions related to taxation or expenditure, but also covers other matters would be considered as a Financial Bill.

Additional Information: Different types of Bills

• Financial Bills: A Bill that contains some provisions related to taxation and expenditure, and additionally contains provisions related to any other matter is called a Financial Bill. Therefore, if a Bill merely involves expenditure by the government, and addresses other issues, it will be a financial bill.
• Money Bills: A Bill is said to be a Money Bill if it only contains provisions related to taxation, borrowing of money by the government, expenditure from or receipt to the Consolidated Fund of India. Bills that only contain provisions that are incidental to these matters would also be regarded as Money Bills.
• Constitution Amendment Bills: These are Bills which seek to amend the Constitution.
• Ordinary Bills: All other Bills are called ordinary bills.

Key Terms Long-Term Capital gains: For tax purposes, an Increase in the price of a savings instrument (Capital Gain) is treated at a lower rate if the instrument is held for more than three years.Indexation: Indexation is used to adjust the purchase price of an investment to reflect the effect of inflation on it. For Example: Consider a capital gain of Rs. 50,000. Indexation considers The cost of inflation index (CII) and reduces the capital gain to a lower value, thereby saving the tax liabilitySecurities Transaction Tax (STT): It is a tax payable in India on the value of securities transacted through a recognized stock exchange.REITS/InviTs: Real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) are instruments that allow developers to monetise revenue-generating real estate and infrastructure assets while enabling investors to invest in these assets without actually owning them.

Source

Ban on Transgendered female athletes

In News

• Recently, transgender women have been barred from competing in the female category by World Athletics (WA)(the international governing body for track and field)

Major Points 

• WA has followed the path of FINA, the international swimming federation, which enforced a similar ban in June last year.

• The ban & research:
  • Transgender women who have experienced male puberty will not be able to compete in the female competition after March 31 this year. 
  • However, the World Athletics Council has set up a working group to conduct research “to further consider the issue of transgender inclusion”.
• Previous rules:
  • Under the previous rules, there was no blanket ban, but transgender women had to reduce the amount of blood testosterone to 5 nanomoles per litre (nmol/L) and maintain this level for 12 months in order to participate.
    • WA had previously come up with the ‘preferred option’ for transgender women. 
    • Instead of a complete ban, WA said it would allow transgender women to compete in the female category but would reduce the blood testosterone limit to below 2.5nmol/L for two years basically cutting it down by half, and doubling the time period before they become eligible to compete.

Reasons for ban

• WA focuses on the physical advantages men have over women post-puberty. 
• The substantial sex difference in sports performance that emerges from puberty onwards means that the only way to achieve the objectives set out is to maintain separate classifications (competition categories) for male and female athletes.
• Events leading to the decision:
  • The debate has raged since New Zealand weightlifter Laurel Hubbard competed in the women’s 87-kg class at the Tokyo Olympics, although she had participated in the men’s category earlier.
  • NCAA swimmer Lia Thomas used hormone replacement therapy and moved from the men’s category to the women’s category. She started breaking records in the IVY League competition before FINA stepped in.

Other sports with similar bans for transgender female athletes?Rugby:It was World Rugby in 2020 which became the first international sports federation to bar transgender women from female competition. Following this, Rugby Football League and Rugby Football Union also banned transgender women from female competition.Triathlon:Last year, British Triathlon implemented a similar ban.Olympics:The International Olympic Committee’s Framework on Fairness released in November 2021 stated that “athletes are not excluded solely on the basis of their transgender identity or sex variations”.But the IOC had put the onus on sports federations to put in place rules.

Transgender

• The Transgender Persons (Protection of Rights) Act, 2019 defines “Transgender person”, as a person whose gender does not match with the gender assigned to that person at birth and includes trans-man or trans-woman (whether or not such person has undergone Sex Reassignment Surgery or hormone therapy or laser therapy or such other therapy), a person with intersex variations, genderqueer and person having such socio-cultural identities as Kinner, hijra, aravani and jogta.

The legal status of Transgender Community in India

• The Supreme Court in National Legal Services Authority (NLSA) v. Union Of India, famously known as the NALSA Case, has directed Centre and State Governments to grant legal recognition of gender identity whether it be male, female or third-gender.
  • Further, it declared that hijras and eunuchs can legally identify as “third gender”.
• Fundamental Rights:
  • In recognizing the third gender category, the Court recognized that fundamental rights are available to the third gender in the same manner as they are to males and females. 
• Self-identification:
  • The Court upheld the right of all persons to self-identify their gender.
  • Thus, it held that no third-gender persons should be subjected to any medical examination or biological test which would invade their right to privacy.
• Socio-Economic Rights:
  • Recognising third-gender persons as a “socially and educationally backward class of citizens”, entitled to reservations in educational institutions and public employment.

Challenges faced by Transgender Community:

• Lack of acknowledgment: 
  • Even in this era of scientific pragmatism and logical empiricism, we see society’s refusal to acknowledge the LGBTQIA+ community on par with the “heteronormals”.
• Extensive problems:
  • Problems of sexual abuse, familial dysfunction, peer rejection, juvenile delinquency, societal taboo, sexual disharmony, unsafe sexual behaviour and drug abuse are rampant amongst this community while growing up. 
  • Unrecognised marital status, hazards of adoption, housing, property inheritance, difficulty finding regular employment, discrimination and harassment at the workplace, etc., are recurring and diabolical features of their daily lives. 
• Mental and physical consequences:
  • The mental and physical consequences of these prejudices take a toll on their lives. Ageism and sexual discrimination are other hassles.
  • Increasing evidence points out that depression, suicides, self-harm and substance abuse are twice as common in LGBTQIA+ individuals compared to heterosexual people.
• Bias & discriminatory attitudes:
  • Even healthcare professionals and institutes show alarmingly high rates of homophobic bias and discriminatory attitudes.

Initiatives for Transgender Persons in India:

• SMILE Scheme: The Department of Social Justice & Empowerment launched the Central Sector scheme “SMILE: Support for Marginalised Individuals for Livelihood and Enterprise”.
  • This umbrella scheme is designed to provide welfare measures to the Transgender community and the people engaged in the act of begging.
• Transgender Persons (Protection of Rights) Act, 2019:
  • The law passed by the Parliament aims to end discrimination against transgender persons in accessing education, employment and healthcare and recognise the right to self-perceived gender identity.
• Transgender Persons (Protection of Rights) Rules, 2020: 
  • It has been framed by the government to give effect to the provisions of the Transgender Persons (Protection of Rights) Act, 2019.
• National Council for Transgender Persons: 
  • In pursuance of the Transgender Persons (Protection of Rights) Act, 2019, the National Council for Transgender Persons has been constituted to advise the Central Government on the formulation and evaluation of policies, programmes, legislation and projects for the welfare of the transgender community.
• Reservation for the transgender community: 
  • The Union government is planning to bring reservations for the community under the OBC category in employment.
• National Portal for Transgender Persons:
  • It is a portal by the Ministry of Social Justice and Empowerment which assists persons of the transgender community in applying for a Certificate and Identity card digitally from anywhere in the country.
  • Through the Portal, they can monitor the status of their application which ensures transparency in the process.
• Garima Greh:
  • The scheme aims to provide shelter to Transgender persons, with basic amenities like shelter, food, medical care and recreational facilities.
  • Besides, it will provide support for the capacity-building/skill development of persons in the Community, which will enable them to lead a life of dignity and respect.

Conclusion and Way Forward 

• There is a need to sensitise the society that the community is a part of us and are co-equals.
• Sensitising law enforcement: There is also a need to sensitise the legal and law enforcement systems towards the challenges of the community.

OBC Listing

In News

• Recently, Odisha Government introduced an OBC law to include castes in the State list by notification.

About

• The State government has proposed an amendment in Section 9 of the Odisha State Commission of Backward Classes Act 1993, by inserting, “notwithstanding anything contained in sub-section (1), the State government, may, by notification, include such backward classes in the list, if the said backward classes have been specified in the Central list in relation to Odisha.”
  • This Law gives power to the State government to include any class of citizens as Backward Class in the State list if the said class has already been notified by the Government of India as OBC for the State of Odisha.

Origin: OBCs in India

• First defined in the 1980 Mandal Commission report, OBCs among Hindus were identified based on socio-educational field surveys, lists of OBCs notified by various State governments, the 1961 Census report, and extensive touring of the country. 
• Among non-Hindus, the caste system was not found to be an inherent part of the religion.
  • However, for equality, untouchables who converted from Hinduism and occupational communities known by their traditional hereditary jobs, such as the Gujjars, Dhobis, and Telis, were also identified as OBCs.

Listing:

• Even though there is one SC & ST list for reservation benefits, in the case of OBCs, States were empowered to maintain their own list of OBCs to provide necessary benefits. Thus, we have
  • Union OBC list for reservation in Central government jobs & Central Educational institutions
  • OBC lists at the State level (varies with each state) for reservation in State government jobs & State Educational institutions.
• The Constitution (102nd Amendment) Act, 2018 granted constitutional status to the National Commission for Backward Castes (NCBC). It further inserted:
  • Article 338B, which deals with the structure, duties, and powers of the NCBC.
    • It was tasked with monitoring safeguards provided for socially and educationally backward classes, giving advice on their socio-economic development, inquiring into complaints and making recommendations, among other functions.
  • Article 342A, which deals with the powers of the President to notify a particular caste as an SEBC and the power of Parliament to change the list.

Supreme Court’s observations and 127th Constitution Amendment Bill, 2021

• The Supreme Court (in the Maratha Reservation case)  had ruled that only the Centre had the power to draw up the OBC list, as per the above interpretation of Constitution (102nd Amendment) Act (Article 342A only mentions President & Parliament with no reference to states)
• To reverse the verdict and to restore the powers of the state governments to maintain state list of OBCs, Parliament passed 127th Constitution Amendment Bill, 2021
  • Amendment in Articles 366(26C) and 338B (9), after which states will be able to directly notify OBC and SEBCs without having to refer to the NCBC, and the “state list” was being taken out of the domain of the President and will be notified by the Assembly.

Constitutional Provisions for OBCArticle 15 (5): This clause was added in the 93rd amendment in 2005 and allows the state to make special provisions for backward classes or SCs or STs for admissions in private educational institutions, aided or unaided.Article 16(4): This clause allows the state to reserve vacancies in public service for any backward classes of the state that are not adequately represented in the public services.Article 16 (4A): This allows the state to implement reservation in the matter of promotion for SCs and STs.Article 16(4B): This allows the state to consider unfilled vacancies reserved for backward classes as a separate class of vacancies not subject to a limit of 50% reservation.Article 340: This Article provides the president the power to  Appointment of a Commission to investigate the conditions of backward classesArticle 338B: This article provides constitutional status for  National Commission for Backward Classes.

Supreme Court judgment on UAPA

In News

Recently, Supreme Court clarified that a person who “is or continues to be” even a “mere member” of a banned organisation is liable to be found criminally liable under the Unlawful Activities Prevention Act (UAPA) for acting against the sovereignty and integrity of India.

Major Highlights of judgment 

• The judgment referred to Section 10(a)(i) of the UAPA which deals with membership of an unlawful association.
  • The provision says that “where an association is declared unlawful by a notification issued under Section 3 which has become effective under sub-section (3) of that section,—(a) a person, who—(i) is and continues to be a member of such association shall be punishable with imprisonment for a term which may extend to two years, and shall also be liable to fine”.
• The court clarified that persons who had left the organisation and were not members at the time it was declared unlawful, cannot be held liable under Section 10(a)(i) of the UAPA.
• The court said Section 10(a)(i) was fully consonant with the objective of the UAPA to effectively prevent terrorism and unlawful activities.
• The court referred to Article 19(4), which mandated that the citizens’ right to form unions or associations was subject to the power of the state to make laws to impose “reasonable restrictions” in the interests of the sovereignty and integrity of India or public order or morality.

About Unlawful Activities Prevention Act (UAPA)

• It provides special procedures to deal with terrorist activities, among other things.
• The Act provided for declaring an association or a body of individuals “unlawful” if they indulged in any activity that included acts and words, spoken or written, or any sign or representation, that supported any claim to bring about “the cession of a part of the territory of India”, or its “secession”, or which questions or disclaims the country’s sovereignty and territorial integrity.

Pradhan Mantri Ujjwala Yojana(PMUY)

In News

Recently, Cabinet has approved targeted subsidies to Pradhan Mantri Ujjwala Yojana Consumers.

About

• It has approved a subsidy of Rs.200 per 14.2 kg cylinder for up to 12 refills per year. 
• The subsidy is credited directly to the bank accounts of the eligible beneficiaries.
• Indian Oil Corporation Ltd. (IOCL), Bharat Petroleum Corporation Ltd. (BPCL) and Hindustan Petroleum Corporation Ltd. (HPCL) have already been providing this subsidy since 2022.
• All PMUY beneficiaries are eligible for this targeted subsidy. 

Need for the Targeted Subsidy

• There has been a sharp increase in international prices of LPG due to various geopolitical reasons.  It is important to shield PMUY beneficiaries from high LPG prices.
• Targeted support to PMUY consumers encourages them to continue usage of LPG.  

Pradhan Mantri Ujjwala Yojana (PMUY)

• The Government launched PMUY in May 2016, to provide deposit-free LPG connections to adult women of poor households.
• Objectives: It aims to safeguard the health of women & children by providing them with a clean cooking fuel – LPG.
  • Ensuring women’s empowerment, especially in rural India, the connections will be issued in the name of women of the households. 

• Ujjwala 2.0: After the successful completion of Ujjwala Phase 1,  provision for an additional One crore LPG connections under Ujjwala 2.0 was announced in the Union Budget 2021-22.
  • It aims to provide deposit-free LPG connections to those low-income families who could not be covered under the earlier phase of PMUY.
• As on 1st March 2023, there are 9.59 crore PMUY beneficiaries.

Electronics Manufacturing Cluster (EMC)

In News

Union Minister of State for Skill Development & Entrepreneurship and Electronics & IT announced the approval for setting up the Electronics Manufacturing Cluster (EMC) at Dharwad which is expected to create over 18,000 jobs.

About

• The project is being set up at Kotur-Balur Industrial Area in the Dharwad District of Karnataka under EMC 2.0 scheme.
  • Karnataka is emerging as a global Electronics manufacturing hub for the world, just as it is already a telecom hub with Apple plants in Kolar (Wistron) and Devanahalli (Foxconn).
• The Centre and the Karnataka government will set up the cluster with a 50:50 partnership. 

Electronic Manufacturing Clusters (EMC)

• The Electronics Manufacturing Clusters (EMC) scheme: Launched in 2012 to provide support for the creation of world-class infrastructure for attracting investments in the Electronics Systems Design and Manufacturing (ESDM) Sector.
  • Grant assistance
    • Greenfield EMC – 50% of project cost subject to a ceiling of Rs. 50 crore per every 100 acres of land.
    • Brownfield EMC – 75% of the project cost is subject to a ceiling of Rs. 50 crore per project.
  • It is aimed to make India a global player in the field of Electronics Manufacturing and to offset disabilities faced by industries for reliable infrastructure.
• The Modified Electronics Manufacturing Cluster (EMC 2.0) scheme: It was introduced in 2020 with the objective to create world-class infrastructure along with common testing facilities, including Ready Built Factory sheds/Plug & Play infrastructure for attracting Anchor unit along with their supply chain to set up their manufacturing/production facility in the country.
  • It provides financial assistance for the setting up of both EMC projects and Common Facility Centres (CFCs) across the country. 
  • The Scheme is open for receipt of applications for a period of 3 years from the date of notification. A further period of 5 years is available for the disbursement of funds to the approved projects.